TikTok faces the risk of being banned in the US. (Photo: Reuters)

The investigation adds to the troubles for TikTok, which is already facing a ban in the US if its parent company ByteDance does not divest. CNN sources said the FTC is investigating TikTok for alleged violations of the Children's Online Privacy Protection Act, which requires companies to notify parents and get permission before collecting data from children under 13.

The agency is also investigating whether TikTok violated a section of the law that prohibits “unfair or deceptive” business practices when it denied that user data could be accessed by individuals in China.

The FTC could file a lawsuit against TikTok or settle in the coming weeks, according to the source.

The FTC investigation comes as TikTok faces existential danger in the US. Earlier this month, the US House of Representatives voted in favour of a bill that would force ByteDance to divest TikTok or face a ban in the US. The bill now heads to the Senate, where President Joe Biden has said he would sign it if it passes.

TikTok has denied that it is a national security risk. To address concerns, the app has taken steps to store US user data on cloud servers controlled by Oracle and instituted internal protocols that limit access to non-US employees.

In 2022, TikTok admitted to the US Congress that employees in China had access to US user data after media reports. TikTok CEO Shou Chew also admitted that several ByteDance employees were fired for spying on US journalists while hunting down whistleblowers within the company.

(According to CNN)